NEW YORK, United States — Global oil prices surged sharply on Friday, putting them on course for their biggest weekly jump since early 2020 as escalating conflict involving Iran triggered fears of a major disruption to global energy supplies.
U.S. crude oil climbed more than 11pc in midday trading to exceed $90 per barrel, the highest level since October 2023.
International benchmark Brent crude also broke the $90 mark after rising more than 8 percent, reaching its highest level since April 2024.
The rally came amid growing concerns that the ongoing conflict in the Middle East could severely disrupt the flow of oil through critical shipping routes and reduce production across several major exporting countries.
Market anxiety intensified following reports that some producers are already scaling back operations.
According to a report by The Wall Street Journal, Kuwait has begun cutting output at certain oil fields due to limited storage capacity for crude that cannot be exported because of shipping disruptions.
The report could not immediately be independently verified.
The situation is compounded by the near halt of commercial traffic through the strategic Strait of Hormuz, a narrow maritime passage off Iran’s southern coast through which more than 20pc of the world’s daily oil supply normally flows.
Analysts at JPMorgan Chase said the market is increasingly responding to tangible supply disruptions rather than speculative geopolitical risk.
“Commercial traffic through the Strait of Hormuz remains virtually nonexistent,” the bank’s commodities analysts wrote in a market note. “The market is shifting from pricing geopolitical risk to grappling with real operational disruption.”
Hundreds of oil tankers and liquefied natural gas carriers are currently stranded near Iranian waters, unable to transit the strait amid heightened military tensions involving the United States, Israel, and Iran.
Production cuts elsewhere have deepened supply concerns.
Iraq has reportedly reduced output by about 1.5 million barrels per day, while analysts warn that an additional four million barrels per day could be disrupted if the conflict continues into next week.
Since hostilities erupted last weekend, U.S. crude prices have surged nearly 35pc, sending shockwaves through global financial markets.
Wall Street responded sharply to the developments.
The S&P 500 dropped more than 1 percent during afternoon trading, while the Dow Jones Industrial Average fell about 600 points. The tech-heavy Nasdaq Composite declined roughly 0.8pc.
Markets were also pressured by fresh signs of weakness in the U.S. economy after new labour data showed the country lost 92,000 jobs in February, with downward revisions to previous months’ employment figures.
Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management, warned that the combination of slowing job growth and rising energy costs could complicate the economic outlook.
“Add higher oil prices given conflict in the Middle East and renewed tariff uncertainty to the convoluted jobs market story, and you have a tricky, stagflationary mix of risks in the backdrop for the Fed,” she said.
Energy disruptions are also spreading to the natural gas market. Prices for U.S. natural gas rose more than 5pc on Friday, while wholesale gasoline futures climbed as traders priced in higher fuel costs.
For consumers, the impact is already being felt at the pump. The U.S. national average gasoline price has risen to about $3.32 per gallon, roughly 35 cents higher than last weekend, according to data from fuel trackers GasBuddy and AAA.
Analysts warn that if shipping through the Strait of Hormuz remains blocked or severely restricted, global energy markets could face prolonged volatility, with ripple effects across inflation, transportation costs, and economic growth worldwide.
The crisis has also drawn strong rhetoric from political leaders. U.S. President Donald Trump wrote on his Truth Social platform that “there will be no deal with Iran except unconditional surrender,” a statement that further heightened geopolitical tensions.
Energy markets are now closely watching diplomatic developments and military movements in the region, with traders warning that even limited escalation could push oil prices significantly higher in the coming weeks.
